Kraft takes control of Cadbury


The American food group Kraft were finally able to confirm yesterday that they had secured 71.73% of Cadbury shares, giving it control over the 189 year old British chocolate making company, and making it the largest chocolate and confectionery company and the second-largest food company in the world.

It is expected that the remaining shareholders will follow suit and sell to Kraft, with 75% needed for them to be able to remove Cadbury from the stock market, and 90% to force the sale of all remaining shares.

The announcement comes at the end of a very long and much publicised takeover bid, and talk soon shifted to concern about job losses in the UK. Lord Mandelson, the Business Secretary, met Ms Rosenfeld yesterday, chief executive and chairman of Kraft, hoping to secure some assurance about the 4,500 British Cadbury jobs. However, in the wake of the meeting he commented that he "was disappointed that she was unable to confirm that Cadbury's confectionery brands will continue to be managed and operated globally out of the UK.

"On the other hand she said that she expects Britain to be a net gainer in manufacturing output and employment so that was encouraging, but what we've got to do now is to remain in close touch."

Some swift job news did come in the form of Cadbury's top management who announced they will leave the business just 24 hours after shareholders voted in favour of the takeover.  Roger Carr, the chairman of Cadbury, Todd Stitzer, the company's chief executive, and Andrew Bonfield, the and chief financial officer, all said this afternoon that they will leave their positions following the deal.

Irene Rosenfeld, chief executive and chairman of Kraft, said: “Together we have impressive global reach and an unrivalled portfolio of iconic brands, with tremendous growth potential. I warmly welcome Cadbury employees into the Kraft Foods family and look forward to meeting many of them in the days ahead. This combined company has a phenomenal future and I firmly believe it will deliver outstanding returns to our shareholders.”

Drew Nesbitt of Wilson Nesbitt solicitors in Belfast commented that "the resignation of the senior management of Cadbury's is not to be unexpected and neither is the jobs threat posed by the takeover.  This may be the first of multiple food and beverage takeovers this year with companies aiming to leverage greater economies of scale."

If you are based in Northern Ireland and require legal advice in respect of a company purchase or sale, or any other commercial matter, contact Wilson Nesbitt solicitors in Belfast by email at business@wilson-nesbitt.co.uk or by calling 0800 840 9295.
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